Monday, October 21, 2013
Truce in DC
Historians will tell you that the Korean War never ended. A truce was called and is still in effect, however uneasy, but a treaty was never signed. The parties in DC are in much the same position following the "compromise" that ended the Federal Government shutdown and avoided a debt default. In reality, there is an agreement among a majority in both houses to talk about how to proceed, and the government is "funded" until early 2014. But that's it. There is no real agreement about much of anything, except that we don't want to actually default. Where the Administration fits into all this is anyone's guess since, whether the subject is the Middle East, North Korea, or the other end of Pennsylvania Avenue, President Obama insists on "leading from behind," which is to say, not leading at all. At this point, the President is out-whimping Carter.
With three plus years left to endure, how can this President be any weaker?
Make no mistake, there is disunity in both parties. Just as the Tea Party elephants are making the Speaker's life miserable, the progressive wing of the Dems is causing grief for their leadership. They hate the compromise and dearly wanted to stuff revenue measures down Republican throats. You won't hear much of that in the mainstream media, who is maxing out the opportunity to make the GOP look as bad as possible. But the echoes of James MacGregor Burns 1963 book (The Deadlock of Democracy) about four party politics in America still resound.
Imagine if, instead of holding Obamacare hostage to the debt limit, Republicans had taken responsible opposition to raising it by offering serious budget and entitlement discipline proposals instead. Today, what would be dominating the news cycles would be the incompetence surrounding the Obamacare implementation. Dems would be begging for a year's postponement.
Will Washington suddenly find its bearings and take serious action concerning entitlements and the nation's fisc in time to forestall the next debt standoff? The smart money says no. But there is a way forward. There is much that was helpful in the Simpson - Bowles Commission recommendations. Though Paul Ryan's opinion that it did not go far enough was probably correct, the Commission's plan is the most realistically workable that has yet been proposed and Congress should ram it down the President's throat. If the wings of either party actually wanted a solution, that's the one we would get.
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The other interesting news item involves the players boycott at Gambling State which resulted in that proud football program forfeiting last Saturday's game. Most fans don't care since the Tigers are suffering through an uncharacteristic winless season, but the fact is that the episode is one more leading indicator of big changes in football as we know it at all levels of play.
To review, Grambling players' grievances include the firing of popular coach Doug Williams, mold and other problems in the players locker and training areas, staph infections possibly caused by contaminated laundry equipment, and claims of inadequate diagnosis and treatment for concussions. So when they felt ignored once too often, the players simply blew off Saturday's bus trip for the scheduled road game and didn't play.
To a greater or lesser degree, most college football programs have exploited and abused their athletes, in my opinion. Add to the Grambling list, prohibitions against compensation, scholarships arbitrarily ended, insufficient time allocated for academic work, high handed and arbitrary NCAA enforcement decisions which punish players and students for coaches' recruiting errors, and on and on. Their is increasing questioning by college faculties about the propriety of a sport that routinely traumatizes players brains at institutions whose core mission is to develop and prepare those brains for lifetime achievement.
The problems are also bad on the high school level where sometimes incompetent coaching leads to devastating injuries. If you've ever attended your local team's practices, how many times have you've heard coaches yell out to players, "stick your head in there!" Such cringeworthy "advice' is too often the rule rather than the exception.
Football has had serious injuries and fatalities as long as it has been played, and arguably it has never had more fans. However, change is coming, and if the equipment can't be improved to limit serious injury, I would see the rules revamped in the not too distant future to make the game much less physical. It won't be as popular, but if it doesn't happen, only Division 1 schools will have programs, and maybe not many of those.
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On a happier note, we have Boston and St. Louis in the World Series again (the fourth time in the post war era) and this year, these have been the two best teams. The Red Sox look like a team of destiny and they have the odd home game, but the Cards starting pitching is a little better and I look for a long series either way. As a National League fan, I have to admit a bias for the Redbirds, let's say in 7.
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On 9/20, we bought 200 shares of the new News Corp (NWS.A) at 16.92, a value buy, and 100 shares of Newmont Gold (NEM) at 29.34, a "zero buy." On 9/23, we bought 100 shares of SanDiego Gas and Electric preferred (SDO.PR.A) at 24.13 and sold our remaining 8900 shares of FFEX at 2.10 (actually, they were tendered and the cash finally came in.) That transaction generated a small profit but overall, it was a stock that treated us well over the years and provided entertaining ups and downs. On 9/27, we bought 200 shares of Marine Max (HZO) at 12.20. On 9/30, we were back to buying News Corp., 200 shares at 16.20. We started the 4th quarter on 10/1 with a new gold ETF, buying 200 shares of the I shares (IAU) at 12.60. Then on 10/2, we added 300 shares of Genie (GNE) at 9.17. We also bought 100 shares of Xcel (XEL) at 27.71. On 10/7, we bought 100 shares of FPL Preferred (NEE.PRC) at 24.06. Then on 10/9, we were back to buying News Corp again, another 200 shares for 15.80. Then on 10/11, we bought 100 shares of Diebold (DBD), a zero buy at 29.55. Columbus Day, the markets were open and we finally switched to the sell side, trimming 300 shares of USA Trucking (USAK) at 8.92.(It's already moved a lot higher now). We had paid 7.81 for 200 on 8/25/11 and 6.26 for 100 on 5/21/12. We also sold 300 shares of Tat Technologies (TATT) for 7.95. We bought these shares when it was Limco Piedmont on 12/17/08 for 2.85.
On October 15, we were greeted by the news of the redemption of San Diego G & E's preferred shares at 24. We had 800, and took a meaningless capital loss on the transaction, certainly much less than the dividends we have received. Since we also sold 100 shares of streaking Belden Corp (BDC) from the IRA at 66.09, we are left with a lot of cash to deal with. The BDC shares were purchased for 21.25 on 11/05/08, when you couldn't give stocks away. That's the time to buy of course, and that's what our formula is designed to do. On 10/15, we also found a new preferred issue to start buying, Wells Fargo (WFC.PR.P) and we bought 100 shares at 21.64.
If you own and trade individual stocks, this is a good time to think about tax motivated transactions before the street tanks your losers in anticipation. To do this, you need to know your taxable capital gains (or loss) position year-to-date. Of course, my formula makes no allowance for tax considerations, but that doesn't mean I have to be stupid and completely ignore obvious tax savings. I have already picked a stock or two that I am ready to throw in the towel on anyway, and November will be time to kick the dogs out of the kennel.
With three plus years left to endure, how can this President be any weaker?
Make no mistake, there is disunity in both parties. Just as the Tea Party elephants are making the Speaker's life miserable, the progressive wing of the Dems is causing grief for their leadership. They hate the compromise and dearly wanted to stuff revenue measures down Republican throats. You won't hear much of that in the mainstream media, who is maxing out the opportunity to make the GOP look as bad as possible. But the echoes of James MacGregor Burns 1963 book (The Deadlock of Democracy) about four party politics in America still resound.
Imagine if, instead of holding Obamacare hostage to the debt limit, Republicans had taken responsible opposition to raising it by offering serious budget and entitlement discipline proposals instead. Today, what would be dominating the news cycles would be the incompetence surrounding the Obamacare implementation. Dems would be begging for a year's postponement.
Will Washington suddenly find its bearings and take serious action concerning entitlements and the nation's fisc in time to forestall the next debt standoff? The smart money says no. But there is a way forward. There is much that was helpful in the Simpson - Bowles Commission recommendations. Though Paul Ryan's opinion that it did not go far enough was probably correct, the Commission's plan is the most realistically workable that has yet been proposed and Congress should ram it down the President's throat. If the wings of either party actually wanted a solution, that's the one we would get.
--------------------------------------------------------------------------------------------------------
The other interesting news item involves the players boycott at Gambling State which resulted in that proud football program forfeiting last Saturday's game. Most fans don't care since the Tigers are suffering through an uncharacteristic winless season, but the fact is that the episode is one more leading indicator of big changes in football as we know it at all levels of play.
To review, Grambling players' grievances include the firing of popular coach Doug Williams, mold and other problems in the players locker and training areas, staph infections possibly caused by contaminated laundry equipment, and claims of inadequate diagnosis and treatment for concussions. So when they felt ignored once too often, the players simply blew off Saturday's bus trip for the scheduled road game and didn't play.
To a greater or lesser degree, most college football programs have exploited and abused their athletes, in my opinion. Add to the Grambling list, prohibitions against compensation, scholarships arbitrarily ended, insufficient time allocated for academic work, high handed and arbitrary NCAA enforcement decisions which punish players and students for coaches' recruiting errors, and on and on. Their is increasing questioning by college faculties about the propriety of a sport that routinely traumatizes players brains at institutions whose core mission is to develop and prepare those brains for lifetime achievement.
The problems are also bad on the high school level where sometimes incompetent coaching leads to devastating injuries. If you've ever attended your local team's practices, how many times have you've heard coaches yell out to players, "stick your head in there!" Such cringeworthy "advice' is too often the rule rather than the exception.
Football has had serious injuries and fatalities as long as it has been played, and arguably it has never had more fans. However, change is coming, and if the equipment can't be improved to limit serious injury, I would see the rules revamped in the not too distant future to make the game much less physical. It won't be as popular, but if it doesn't happen, only Division 1 schools will have programs, and maybe not many of those.
------------------------------------------------------------------------------------------------
On a happier note, we have Boston and St. Louis in the World Series again (the fourth time in the post war era) and this year, these have been the two best teams. The Red Sox look like a team of destiny and they have the odd home game, but the Cards starting pitching is a little better and I look for a long series either way. As a National League fan, I have to admit a bias for the Redbirds, let's say in 7.
----------------------------------------------------------------------------------------------------
On 9/20, we bought 200 shares of the new News Corp (NWS.A) at 16.92, a value buy, and 100 shares of Newmont Gold (NEM) at 29.34, a "zero buy." On 9/23, we bought 100 shares of SanDiego Gas and Electric preferred (SDO.PR.A) at 24.13 and sold our remaining 8900 shares of FFEX at 2.10 (actually, they were tendered and the cash finally came in.) That transaction generated a small profit but overall, it was a stock that treated us well over the years and provided entertaining ups and downs. On 9/27, we bought 200 shares of Marine Max (HZO) at 12.20. On 9/30, we were back to buying News Corp., 200 shares at 16.20. We started the 4th quarter on 10/1 with a new gold ETF, buying 200 shares of the I shares (IAU) at 12.60. Then on 10/2, we added 300 shares of Genie (GNE) at 9.17. We also bought 100 shares of Xcel (XEL) at 27.71. On 10/7, we bought 100 shares of FPL Preferred (NEE.PRC) at 24.06. Then on 10/9, we were back to buying News Corp again, another 200 shares for 15.80. Then on 10/11, we bought 100 shares of Diebold (DBD), a zero buy at 29.55. Columbus Day, the markets were open and we finally switched to the sell side, trimming 300 shares of USA Trucking (USAK) at 8.92.(It's already moved a lot higher now). We had paid 7.81 for 200 on 8/25/11 and 6.26 for 100 on 5/21/12. We also sold 300 shares of Tat Technologies (TATT) for 7.95. We bought these shares when it was Limco Piedmont on 12/17/08 for 2.85.
On October 15, we were greeted by the news of the redemption of San Diego G & E's preferred shares at 24. We had 800, and took a meaningless capital loss on the transaction, certainly much less than the dividends we have received. Since we also sold 100 shares of streaking Belden Corp (BDC) from the IRA at 66.09, we are left with a lot of cash to deal with. The BDC shares were purchased for 21.25 on 11/05/08, when you couldn't give stocks away. That's the time to buy of course, and that's what our formula is designed to do. On 10/15, we also found a new preferred issue to start buying, Wells Fargo (WFC.PR.P) and we bought 100 shares at 21.64.
If you own and trade individual stocks, this is a good time to think about tax motivated transactions before the street tanks your losers in anticipation. To do this, you need to know your taxable capital gains (or loss) position year-to-date. Of course, my formula makes no allowance for tax considerations, but that doesn't mean I have to be stupid and completely ignore obvious tax savings. I have already picked a stock or two that I am ready to throw in the towel on anyway, and November will be time to kick the dogs out of the kennel.
